24 Apr 2009

Toward a Review of Tom Woods’ Meltdown

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I always thought it was funny when people would use that phrase; e.g. I have a book called Toward a History of Game Theory. I think it means, “If I weren’t so lazy I would write…” For sure, that’s what it means in this blog post.

Flat out, Tom’s book Meltdown is freakin’ sweet. I had trouble getting through the first chapter or two, not because of anything Tom did, but just because I am so sick of talking about Paulson, MBS, Greenspan’s rate cuts, etc.

But after getting through that necessary drudgery, the book was (is) awesome. I am in amazement at how much great economics and obscure history Tom was able to weave into this thing. E.g. he very quickly but elegantly dispatches with typical objections such as, “Well if it was all the Fed’s fault, what about the panics before 1913?” and “Doesn’t the depression of 1937/38 vindicate Krugman?”

But beyond all that, Tom is just a wonderful writer. I periodically put the book down and just imagine hundreds of thousands of people reading the paragraph I just read, and I think, “Wow, that is so great that Tom just shot that into so many minds. Awesome.”

Not that this is even the best passage I’ve come across, but it’s where I am in the book and it illustrates what I mean:

If we want a repeat of [the Depression] years, or if we’d like to share the fate of Japan for the past 18 years, we should listen to Paul Krugman and implement exactly the same policies that gave the world these two disasters. On the other hand, we might for once permit ourselves a heretical deviation from the Official Version of History (TM), cease waving incense before the Great Presidents we are taught to admire, and consider the possibility that the government’s efforts to fight depressions may in fact have lengthened them. Let’s spare ourselves the ordeal of a ten-year depression–and the added indignity of being told ten years from now that it was the government’s brilliant plan that eventually rescued us.

In short, if you have been on the fence about ordering Tom’s book–maybe you think that his buddies at LRC are exaggerating its quality–let me go on the record and say believe the hype. If you have a leftist friend who thinks deregulation caused our woes, and your friend is willing to read one book on the matter just to humor you, go ahead and give him Meltdown. (Just make sure it’s Tom’s Meltdown, since there is some liberal collection of essays with the same title!)

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